What we need, and what we need George Osborne to admit, is if you’ve been trying an approach for two-and-a-half years and it hasn’t worked, you don’t just keep ploughing on regardless

Labour leader Ed Miliband

The Chancellor’s spending drive, financed by cuts at other Whitehall departments, comes ahead of his Autumn Statement today.

It could see more academies and free schools built and transport links upgraded. There will also be a much-needed bounce for the construction industry.

PM David Cameron said the cash injection would “make our country work better”.

Treasury sources said the ­Autumn Statement will spell out how £1bn will go towards building 100 new free schools and academies, creating an additional 50,000 school places.

Whitehall departments will be expected to cut day-to-day spending by 1% (£950m) in 2013/14 and 2% (£2.5bn) in 2014/15.

But health, education, international development, HM Revenue and Customs and nuclear decommissioning will all be protected.

During a school visit yesterday Mr Cameron promised “more roads, more school buildings, more infrastructure to make our economy work better, to make our country work better”.

But Labour leader Ed Miliband said Mr Osborne’s policies had been a “terrible failure” which were “bad for Britain... and I’m afraid what we’re going to see is ordinary families paying the price of that”.

He added: “What we need, and what we need George Osborne to admit, is if you’ve been trying an approach for two-and-a-half years and it hasn’t worked, you don’t just keep ploughing on regardless.”